Company and community

2Access to certain forms of finance

Some donors will only give to charities or community interest companies, because of the protections these vehicles provide that funds will be used for stated purposes. Therefore, access to finance – whether through provide donors, grants or community development finance – may lead a social enterprise to operate as a CIC rather than as a standard company.

 The fact a CIC is set up as a limited company offers a number of specific advantages:

3Limited liability and protection

The primary advantage, as for other businesses operating as a limited company, is limited liability. This provides an important element of security for those who own and manage the business.

At the same time, it provides some protection for any assets related to the social enterprise, which would not generally be available for an unincorporated entity – where they will often be held in the names of individuals.